WhyQatar-topBanner (728x90px)
e - Magazine
LeftSideBar Add 1

LeftSideBar Add 2

LeftSideBar Add 3

LeftSideBar Add 4

For Qatari residents: Do you prefer a summer or winter World Cup 2022?




Building real estate fever

Written by  Author |   Wed, 13 November 2013 14:14


Qatar's real estate market has seen an upturn since the start of 2013, helped by a buoyant hydrocarbon economy and huge infrastructure projects planned for the upcoming FIFA World Cup 2022.

This growth is driven further by an expanding local and expatriate population, a rising number of households and increasing business activity to meet the development needed in the country's infrastructure. Encouraged by Qatar's attractive business environment, major engineering, services, banking and real estate Gulf and Middle East players are drawn to the market.

The IMF estimates that the Qatari government will directly finance $100 billion of capital expenditure over the coming few years, equivalent to 10% of expected cumulative nominal GDP. As a result, Qatar's real estate and construction markets are performing better than peer markets in the region.

Major real estate firms and consultants in Qatar including DTZ, Asteco, Colliers and Ezdan point out that real estate in Qatar is growing across all its asset classes and they attribute this growth to the rising population, as foreign workers, companies, engineers and architects and consultants are relocating to Qatar for work.

According to Qatar Statistics Authority (QSA), the country's population has reached 2,035,106 on September 30 this year, which was a little over 10% than the figure of the corresponding month last year. The figure consists only of people present in Qatar on the date. This figure is projected to increase by 6% per year through to 2016 says Standard & Poor's. An estimated 120,000 new jobs are expected to be created in Qatar annually for the next two years, which will put additional pressure on the demand side of the real estate sector.

Actually, real estate transactions in Qatar have recorded a 32% growth during the summer months compared to the same period last year. The June, July and August months in 2013 saw transactions worth $2.77 billion compared to $2.1 billion during same months in 2012. Some experts consider these figures exceptional in regards to the Qatar's real estate transactions' history.

Growing across all segments
Demand for residential and retail real estate in Qatar remains strong. Residential sales transactions during the summer reached a three-year high according to the latest Asteco Qatar report, led by increased freehold purchase demand in prime areas such as Pearl-Qatar.

According to real estate company Colliers International, currently the residential segment in Qatar is undersupplied due to high employment opportunities as mentioned earlier.

Demand for property ownership is also becoming apparent. According to Ezdan Holding, this demand is driven by the expat engineers, architects, and managers that move and will continue moving to Qatar for jobs.

Foreigners are already buying property at The Pearl-Qatar, says DTZ in a report.  Actually sales have improved in The Pearl-Qatar over the last two years due to local bank financing rates, as well as "greater certainty on occupational costs and improving rental returns".

While the number of transactions has increased, prices have remained stable. According to Asteco, developments in prime markets like Viva Bahriya-Pearl and Porto Arabia-Pearl have registered direct sales prices of up to QAR 16,000 ($4395) and QAR 15,000 ($4120) per square meter on average.

Commercial segment moves slowly
But the commercial segment remains oversupplied, indicates Colliers.  However, after continuous price declines since 2008, a stabilization of rentals, especially within primary grade commercial space, has been observed during 2011- 2012, mainly due to an increase in market confidence and improved economic opportunities.

Retail development, which has already entered the recovery cycle, is arguably the second largest construction activity after residential development. Similar to the housing market, demand for retail floor space is being driven by a growing and increasingly affluent population. 

According to Al Asmakh Real Estate Development Company (Aredc), to meet the demand in retail sector, at least 10 new malls, four-five shopping centers and three-four hyper markets are planned within Doha and the neighboring areas in the next four years. Upon completion of all proposed mall projects, the total net leasable areas among all existing and upcoming malls would be 1.61 million m2.

The highest demand for existing and new outlets has been coming from the garment segment and luxury brand stores, notes a report by Aredc. Restaurants, which stated that coffee shops come next.

Rental remains stable for now
On the other hand, the rental market is witnessing a state of stability, indicates a DTZ report. The supply is still higher than the demand. But prices are expected to go up from next year supported by expectations of increased demand for housing in the coming period.

According to Global Research, the office rental market has remained unchanged in 2013. Demand for part-floor leasing options, including separate utilities, services and parking facilities, continues to be buoyant. Also, demand for fitted office spaces (500 m2) has remained strong. Rental rates in Pearl Qatar have risen 7%YoY.

Apartment rental rates for units on the Pearl-Qatar rose by 7% year-on-year, with in-demand one and two-bedroom units renting at QAR 9,000 ($2472) to QR 16,000 ($4395) per month, and three-bedroom apartments commanding monthly rates of up to QR 19,000 ($5220).

Similarly, demand for serviced apartments has increased benefiting from the pressure for residential product and diminished availability, and a surge in demand due to the number of conferences and exhibitions being held in Doha during 2013.

Read 7862 times

Leave a Comment

Make sure you enter the (*) required information where indicated. HTML code is not allowed.

WhyQatar Magazine is an environmentally conscious publication
October / 10 / 2014
ISSUE
MOST POPULAR »
VIDEO STREAMING
WhyQatar-Right Left Ad (247x244px)
WhyQatar-Right Squared (116x116px)
WhyQatar-Right Squared 2
WhyQatar-Right Squared Bottom (116x116px)
WhyQatar-Right Rectangle (116x380px)
Links

DIGITAL COPIES ARCHIVE

TO READ OUR FREE DIGITAL MAGAZINES CLICK ON A COVER

RightSideBar_345x175 Add 1
RightSideBar_345x175 Add 2
RightSideBar_345x175 Add 3
RightSideBar_345x175 Add 4